RBI) has announced new rules and regulations to enhance the scope of Unified Payments Interface (UPI) payments.
About new rules
Enhancing UPI transaction limit:
- The transaction limit for UPI payments made to hospitals and educational institutions has been hiked to Rs 5 lakh from Rs 1 lakh earlier.
- Transaction limit for UPI is capped at Rs. 1 lakh, except in a few categories like Capital Markets (Broking, Mutual Funds, etc.), Collections (Credit card payments, Loan re-payments, EMI), Insurance etc. where transaction limit is Rs. 2 lakhs.
- Increased e-Mandates for Recurring Online Transactions: Limits for execution of e-mandates without Additional Factor of Authentication (AFA) increased from Rs 15,000 to Rs 1 lakh for credit card bill payments, mutual fund subscriptions and insurance premiums.
National Payments Corporation of India (NPCI)
- NPCI is an umbrella organization for operating retail payments and settlement systems in India.
- It is an initiative of RBI and Indian Banks’ Association (IBA) under provisions of Payment and Settlement Systems Act, 2007.
- It has been incorporated as a “Not for Profit” Company under provisions Section 8 of Companies Act 2013.
- It has launched payment products such as RuPay card, IMPS, UPI, BHIM, BHIM Aadhaar, Bharat BillPay etc
Unified Payments Interface (UPI) and its Features
- UPI powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features e.g., transfer of funds, etc.
- It was developed by NPCI in 2016 and built over Immediate Payment Service (IMPS) infrastructure.
- It is the most successful real-time payment system globally, providing simplicity, safety, and security in person-to-person (P2P) and person to-merchant (P2M) transactions in India.
New Features of UPI
- Credit Line on UPI: It enables pre-sanctioned credit lines from banks via UPI. Earlier, only the deposited amount could be transacted through the UPI System.
- UPI Lite X: Users can both send and receive money offline through any compatible device that supports Near Field Communication (NFC).
- UPI Tap & Pay: It allows NFC-enabled QR codes at merchants to complete payments, with a single tap without entering the PIN.
Near Field Communication (NFC) is a short-range wireless connectivity technology that transmits data through electromagnetic radio fields to enable two devices to communicate with each other.
Initiatives to promote UPI
- UPI for secondary market: Introduced by NPCI to enhance the ease of equity trading in country.
- UPI Chalega Campaign: Launched by NPCI to promote UPI as an easy, safe, and instant mode of payment. It also educates users about various features such as UPI LITE that enables swift low value transaction.
- MoU between Google India Digital Services and NPCI International Payments: To broaden use of UPI payments, enabling travellers to make transactions abroad and ease remittances process between countries.
- India’s UPI in overseas markets: Various countries like Oman, UAE, France, Nepal, Bhutan etc. are using UPI system for payment.
- UPI 123PAY: It is an instant payment system for feature phone users who can use UPI payment service in a safe and secure manner.
